TOKYO - Japan, the world's second-largest economy, may have found a way to
reduce its almost total dependence on other countries for the oil that drives
the industries on which the country's wealth is built.

Betting that Japan can extract and commercially exploit methane hydrate, the
hoped-for alternative to oil, investors last week drove up the price of Japan
Drilling, a company established in 1968 but only this month raising money by
selling shares to the public.

Japan Drilling won the attention of market players because it is

involved in the niche field of researching and developing methane hydrate.

The mineral is abundant in the seabeds surrounding Japan and may, over and
above revitalizing the country's economy, reshape Tokyo's diplomatic and
military relationships with the outside world, including the United States.

Japan has few mineral resources to speak of. It imports 99.7% of its crude oil,
importing 87% of its oil from the Middle East. That makes the country heavily
reliant on a secure sea lane stretching from the Middle East to Northeast Asia.
Maintenance of good diplomatic relations with energy suppliers and with its
military backer, the United States, is also essential.

Methane hydrate is a frozen methane gas found in a high-pressure,
low-temperature environment, such as seabeds and beneath frozen ground. It is
often called burning ice. Methane itself is a component of natural gas.

There are growing expectations that methane hydrate will come to serve as a
valuable energy resource. The US, China, Canada and South Korea are among other
countries seeking to develop commercially viable extraction technology.

In Japan, the government is backing efforts to complete research and
development by 2018 and launch commercial production after that.

The volume of methane hydrate in seafloor sediments around Japan alone is
estimated to be enough to provide energy equivalent to 90 years of the nation's
natural gas usage today.

In 2007, the government announced that there were 1.14 trillion cubic meters of
methane hydrates in a Pacific Ocean trench, the Nankai Trough, some 50
kilometers from the eastern coast of Honshu, the main Japanese island. This
reserve is equivalent to almost 14 years of gas use by Japan at current rates -
equivalent of a giant gas oil field. Other reserves are also buried around
Japan.

There are, though, hitches. Much of Japanís methane hydrate is in the seafloor
1,000 meters to 1,500 meters below the surface, making extraction a major
technological challenge. In March 2008, the Japan Oil, Gas and Metals National
Corp (JOGMEC) succeeded in extracting methane from methane hydrate reserves
under the tundra of northwestern Canada. This extraction from a deposit more
than a kilometer below the Earth's surface has been hailed as the major
breakthrough for which Japan had been waiting.

A broader doubt hangs over the environmental suitability of methane hydrate,
particularly as global concern over pollution of the atmosphere has become more
intense thanks in part to publicity surrounding this month's Copenhagen climate
talks. Although methane is a cleaner-burning fossil fuel than coal or oil, more
than a few scientists and environmentalists are concerned that as-yet untapped
methane hydrates represent "captured" greenhouse gasses that should remain
locked under the sea.

Such concerns are rejected by Koji Yamamoto, a project director at the JOGMEC.
"Can environmental disaster happen by gas hydrate production? The answer is no.
Methane hydrate consists of pure water and methane, and no harmful substances.

"Some people are also afraid of a chain chemical reaction" in the extraction
process, Yamamoto said. "However, it never happens. The gas hydrate is quite
stable material ... Geological events of massive gas hydrate dissociation might
be caused by changes in global scale ocean conditions. Artificial gas
production is a completely different phenomenon."

Even so, to ease such environmental concerns, the Central Research Institute of
Electric Power Industry in Tokyo has developed technology that will absorb
carbon dioxide to increase production of methane hydrate. This technology uses
the heat of carbon dioxide for hydrate production and is expected to limit the
emission of greenhouse gases.

That should be good news for Japan Drilling, Japan's sole offshore drilling
contractor, which listed on Thursday on the first section of the Tokyo Stock
Exchange.

Investors certainly like the look of the stock, which after being offered at
3,800 yen per share on Thursday morning surged 59.2% in two days, closing at
6,050 yen on Friday.

But they might have to wait some time before they see full-scale commercial
drilling and extraction. "Methane hydrate will surely help boost Japan's
self-reliant defense," a Japanese military analyst, Toshiyuki Shikata, told
Asia Times Online. "But it takes a long time to use it commercially. And it is
still unsure if it pays off to invest in research and development of the
mineral."

Kosuke Takahashi is a Tokyo-based journalist. Besides Asia Times Online,
he also writes for Jane's Defence Weekly as a Tokyo correspondent. He can be
contacted at letters@kosuke.net.